Seattle is a townhome and small multifamily town. State middle housing law and the city's newer zoning let more lots carry several homes, but permit reviews, critical areas, tree rules and a long rainy season can stretch a schedule, and every extra month costs money.
In short: Our top pick for Seattle ground-up construction is LendingStreet. We finance investor builds of 1 to 8 units, including townhome and rowhouse projects, fourplexes, ADU projects and spec homes, with loans sized on loan-to-cost and terms set per project. Draws are released after inspections, LLC borrowers are standard, and finished rentals can refinance into a 30-year DSCR loan qualified on rent. Get a quote with the form below or call (877) 298-1001.
LendingStreet is built for investors, and our construction loans match the way Seattle builders work: several units on a single lot, often sold individually or held as rentals. We finance 1-8 unit projects, from a detached home with ADUs to a four-unit townhome row or a small 5-8 unit building near transit.
Each loan is sized on loan-to-cost around your plans, permits, budget and builder track record. Draws follow inspections, so funding tracks progress. If you plan to hold, our DSCR program can take out the construction loan on the finished rental.
Have a site in review? Share the details through the form below or call (877) 298-1001.
In the city, infill townhome and multi-unit work concentrates in Ballard, Greenwood, Crown Hill, Beacon Hill, Columbia City, Rainier Valley, Delridge, West Seattle, Lake City and around light rail stations such as Northgate and Roosevelt. Most sites are older single-family lots being replaced with three to six homes.
Around the region, Shoreline, Lynnwood, Everett, Renton, Kent, Burien, Tacoma and Federal Way offer lower land costs and their own versions of middle housing rules. Each city has its own permit office and fees.
Building permits in Seattle go through the Seattle Department of Construction and Inspections. Review time depends on project complexity and submittal quality, so treat permit time as a real cost. Washington's middle housing law requires cities like Seattle to allow more homes per residential lot, and the city's zoning has been updated to match; confirm current rules for your site.
Environmentally critical areas, including steep slopes and landslide-prone ground, add geotechnical work and review. The city's tree protection rules can shape the site plan. Many zones carry Mandatory Housing Affordability requirements that add a fee or require affordable units.
Unit lot subdivision is common for townhomes, letting each home be sold separately. If that is your exit, plan the subdivision alongside the building permit.
A general comparison with other lender types Seattle builders talk to. Their terms vary, so take the right-hand columns as typical patterns only.
| What builders need | LendingStreet | Typical local bank | Typical hard money lender |
|---|---|---|---|
| Focus | Built for investors building 1-8 unit rentals and spec homes | Often favors existing customers with deposits | Short-term deals of many kinds |
| How the loan is sized | Loan-to-cost, with terms set per project | Often lower leverage plus a full personal financial review | Varies by lender |
| Several homes on one lot | Yes, townhome and multi-unit projects up to 8 units | Varies | Varies |
| What gets reviewed | Plans, permits, budget and builder experience | Often tax returns, financial statements and liquidity | Varies; often the deal and the lot |
| Borrowing entity | LLC borrowers are standard | Varies by bank | Usually allowed |
| Draws | Released after inspections on a set schedule | Varies; may run through internal review | Varies by lender |
| After the build | Refinance into a 30-year DSCR loan qualified on rent | Usually a separate loan with income documents | Usually no long-term option |
| Where they lend | All 50 states and DC | Usually a local footprint | Usually local or regional |
This example is illustrative and not a quote.
An investor buys a single-family lot near a light rail station for $640,000 and builds four townhomes. Hard costs are $1,460,000 and soft costs, including design, geotechnical work, permits and MHA fees, are $250,000. Total cost is $2,350,000. In this illustration the loan is sized at 75% of cost, $1,762,500, and the investor brings $587,500. Hard costs are drawn in about 6 stages of roughly $243,333 after inspections.
At completion the four homes are valued at $3,050,000 together and each rents for $3,600, or $14,400 a month. Carrying the full $1,762,500 into a DSCR loan would produce a DSCR near 0.97x. Paying down $162,500 to a $1,600,000 refinance (about 52.5% of value) gives estimated principal and interest of $10,779, taxes of $2,338 and insurance of $567, a total of $13,684 and a DSCR of about 1.05x.
Washington applies sales tax to most construction labor and materials, which can be a meaningful share of hard costs. Property tax rates in King County vary by levy area, and new construction is added to the rolls as it is completed. Confirm the rate for your parcel with the county assessor.
On a sale, Washington charges a graduated real estate excise tax, and cities add a local portion. Earthquake coverage is optional and priced separately, so decide early whether to carry it.
Seattle also licenses short-term rental operators and limits how many units one operator can run, so model a hold on long-term rents.
Use the same list with every lender you talk to:
LendingStreet's answers: we size on loan-to-cost and set terms per project, with leverage that can be lower on large balances and 5-8 units (varies by program); draws are released after inspections on a set schedule; we want builder experience or an experienced general contractor; LLC borrowers are standard; and finished rentals can refinance into a DSCR loan at a 1.0x standard minimum, with seasoning that varies by program.
Lenders move fastest on projects with permits issued or in late review, a detailed budget with contingency, a geotechnical report where the site needs one and a builder who has delivered similar townhomes. Projects without plans or permits, or with no build track record and no experienced general contractor, usually do not qualify.
Projects of 9 or more units go to our commercial team. For 1-8 unit builds in Seattle and the Puget Sound area, get a quote with the form below or call (877) 298-1001.
We recommend LendingStreet. We are built for investors, finance 1-8 unit townhome, fourplex and spec projects on loan-to-cost, release draws after inspections and can refinance finished rentals into a 30-year DSCR loan.
Yes. We lend in Seattle, King, Snohomish and Pierce counties, statewide in Washington and in all 50 states and DC, on non-owner-occupied investment property.
Yes, up to 8 units, if zoning and permits allow it. Confirm the current rules for your lot with the city before you design.
They add engineering, review time and cost. We want those reports and costs in the budget so the loan is sized on a realistic total.
Often, yes, if the project is set up for separate sale, such as through a unit lot subdivision. Tell us your plan at the start so we can structure for it.
Work is completed in stages, an inspection confirms each one, and the draw is released. Our draw schedule calculator helps you plan stages.
Yes. The finished rental qualifies on its rent with no W-2s or tax returns. The standard minimum DSCR is 1.0x and the minimum credit score is 620.
Builder experience matters. Without a track record, an experienced general contractor is usually required.
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